Acquisitions and Dispositions
|3 Months Ended|
Mar. 31, 2019
|Business Combinations [Abstract]|
|Acquisitions and Dispositions||
Acquisitions and Dispositions
During the first quarter of 2019, the Company completed various acquisitions and dispositions of additional working interests and acreage located in our existing core operating areas within the Permian Basin. The Company purchased mineral rights for $21,407 in the Spur operating area and received proceeds of $14,084 for certain leasehold interests in our WildHorse acreage, including customary purchase price adjustments.
On August 31, 2018, the Company completed the acquisition of approximately 28,000 net surface acres in the Spur operating area, located in the Delaware Basin, from Cimarex Energy Company, for $539,519, including customary purchase price adjustments (the “Delaware Asset Acquisition”). The Company issued debt and equity to fund, in part, the Delaware Asset Acquisition. See Notes 5 and 9 for additional information regarding the Company’s debt obligations and equity offerings. The following table summarizes the estimated acquisition date fair values of the acquisition:
The preliminary purchase price allocations are subject to change based on numerous factors, including the final adjusted purchase price and the final estimated fair value of the assets acquired and liabilities assumed. Any such adjustments to the preliminary estimates of fair value could be material.
In addition, the Company completed various acquisitions of additional working interests and mineral rights, and associated production volumes, in the Company’s existing core operating areas within the Permian Basin. In the first quarter of 2018, the Company completed acquisitions within Monarch and WildHorse operating areas for $37,770, including customary purchase price adjustments. In the fourth quarter of 2018, the Company completed acquisitions of leasehold interests and mineral rights within its WildHorse and Spur operating areas for $87,865, including customary purchase price adjustments.
On April 8, 2019, the Company entered into a definitive agreement regarding the sale of certain non-core assets, the Ranger assets, in the Midland Basin for initial cash proceeds of $260,000, excluding customary purchase price adjustments. The agreement also provides for potential contingency payments of up to $60,000 based on WTI average annual pricing over a three-year period.
The sale of the Company’s Ranger assets will not significantly alter the relationship between capitalized costs and proved reserves, and as such, all proceeds will be recorded as adjustments to our full cost pool with no gain or loss recognized. We expect the transaction to close in the second quarter of 2019.
The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef